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Mortgage activity slows

26 February 2004
New figures revealing a slowdown in mortgage redemptions during January have been published by the British Bankers' Association.

The statistics show that gross new mortgage lending equalled £14.2 billion last month, while loans were also at a low level, following usual December and January trends, with a total value of £12.2 billion.

In addition net consumer credit increased more than usual with a £0.9 billion rise, while results for overdrafts and personal loans were very close to past January figures.

Commenting on the results, director of statistics at the BAA, David Dooks, explained: "The turn of the year usually sees weaker mortgage activity and this year was no exception, as witnessed by lower gross lending and number of loan approvals.

"In fact, the strong net lending figure in January was the product of banks seeing fewer redemptions than of late suggesting that the major banks were retaining customers, whilst competing successfully for new borrowers."

Other findings from the BBA figures show that the amount of new borrowing on credit cards is growing slowly at £237 million, reportedly due to cardholder's repayments counteracting new spending.